Everyone gets a bit obsessed with the wrong things when it comes to Amazon competition.
The first mistake is to get blinded by sales volume and ignoring the competition and what that will do to your profit margin. If you can’t produce a differentiated product, don’t go into a market.
However, you need to assess the competition correctly.
REVIEWS – WHAT REALLY MATTERS
The biggest red herring is to worry about the raw number of reviews the competition has without looking at the quality of the listing and of those reviews.
But it is true that you won’t look credible with 5 reviews if the nearest competitor has 200. A rule of thumb was that you want to aim to get at least 50% of the same number as your nearest competitor.
I’m not really convinced any more. Given that it’s also harder to get reviews than ever in the USA, I would focus on quality more than quantity. Still, it’s worth avoiding markets where you’re going to have to get more than 50-100 reviews unless you have really deep pockets, in my view.
More important is the average review, ie the average no. of stars. If everyone has 4.7-5.0 stars average, you’ll struggle to compete unless your product is amazing. If everyone has 3-4 stars, it makes me wonder whether you are just asking for trouble – read the reviews in detail and find out!
A sweet spot is when quite a few page 1 products have 3-4 star reviews and lots have 4.5-5 stars. This implies there are winning and losing products. Investigate – what makes the winners win? Can you solve the issue from the low rated products with a better product?
If the market looks over competitive, at this point I would just walk away unless I had really deep pockets and lots of Amazon experience.
COMPETITION ANALYSIS – MAIN PHOTOS AND PRICES
If the market still looks viable, I would investigate the competition in great detail. First, I would review the page 1 photos and price points. Are there crappy looking products selling for a decent price? It’s unusual but if so, you may have found a niche that is underserved. More likely, can you see a way to produce a more beautiful product?
IN DEPTH COMPETITION LISTING ANALYSIS
If, and only if, the market still looks viable, I would then look at every listing on page 1. How many of the (usually 9) available photos do they use? How good are they? Do they have lifestyle shots? (showing the product in use) Do they use models?
Photos are crucial on Amazon, so I’ve stopped worrying too much about the Bullet points looking great. But great photos make a huge difference.
Remember: it’s not going to be enough these days to do decent photos. You’ll need to have a genuinely better product to command solid prices and take sales off the competition! Don’t delude yourself about the power of photography in mature markets. Good photography is a price of entry now, not a way to win.